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Cost and financing of the FIER II Project
Initiating institution: IFAD
Borrower/benefitiary: Minister of Economy and Finance
Executive agency: Ministry of National Entrepreneurship, Employment and Vocational Training
Total project cost: EUR 99.1 million (approximately USD 100 million)
The total cost of the project over seven (07) years (Contingencies and all taxes included) is estimated at 100.0 million USD equivalent to 59.5 trillion FCFA. The base costs are 91.2 million USD equivalent to 54.3 trillion FCFA, or 91.2 percent of the total costs. The physical and financial unforesten amounts to 8.8 million USD, or 5.2 trillion FCFA matching to 8.8 percent of the total costs. Investment costs represent 88 percent of the base project costs, or USD 80.7 million (approximately FCFA 48.0 trillion). Operating costs represent 12 percent of these costs (10.5 million USD approximately 6.3 trillion FCFA), (see details in the table Summary of project costs by expenditure category).
The implementation of the project will require approximately 12.8 million USD (equivalent to 7.6 trillion FCFA) in foreign currency, or 13% of the total project costs, and 87.2 million USD (or 51.9 trillion FCFA) in local currency, or 87% of the total project costs. The share of foreign currency costs is mainly explained by the specific needs linked to equipment, vehicles, work to set up aggregate infrastructures and other expenses linked to operations, study trips, training abroad. As much as possible, the project will call on national institutions, regional/national consultancies and consultants to limit the use of foreign currencies. Likewise, the purchase of equipment and vehicles is limited to what is strictly necessary.
Project costs by component
FIER 2 is structured into three (03) following components: (i) Make the institutional and socio-economic environment favorable to the promotion of entrepreneurship and employment of rural youth who include the following sub-components: 1.1 Strengthening public and private institutional capacities for the training and economic integration of rural youth and 1.2 Creation of residual aggregate economic infrastructures for young people, which will be operated and managed immediately; (ii) Support rural youth to generatecent income through sustainable access to financial and non-financial services adapted to their needs and markets requirements, which include the sub-components, 2.1 Support rural youth to choose their professional trajectory and to access adapted non-financial services and 2.2Promote rural youth to adapted financial services; (iii) Project coordination and management.
The component, "Supporting rural youth to generatecent income through sustainable access to financial and non-financial services adapted to their needs and markets requirements, which includes the sub-components" is the main component of the project with an estimated cost of 62% of the base cost. It is followed by the first component "Making the institutional and socio-economic environment favorable to the promotion of entrepreneurship and employment of rural youth" which implementation will require 23% of the base costs of the project. The third and final component, "Project coordination and management Strengthening institutional, management and monitoring and evaluation capacities" will absorb approximately 15% of the base costs of the project.
Project costs by expenditure category
The FIER 2 project is organized into welcome (12) expenditure categories, seven (07) expenditure categories following: (i) Civil/rural engineering, (ii) Guarantee fund, (iii) Refinancing fund, (iv) Equipment/ equipment, (v) Vehicle, (vi) Cost-share subsidies, (vii) Consultant services, (viii) Non-consultant services, (ix) training, information, awareness, communication, (x) workshop, seminar, (xi) ) operation and (xii) Staff costs. Based on the importance of the resources allocated to each of them, the main categories of expenditure are (i) "Cost-share subsidies", (ii) "training, information, awareness, communication", (iii) "Engineering civil/rural and (iv) "staff costs" with a forecast allocation representing respectively 34%, 22%, 16% and 10% of the basic project costs. There come the following categories of expenditure: (v) "equipment and materials" and (vi) "non-consultant services" which each consumes 4% of the basic project costs, (vii) "guarantee fund" and (viii) "refinancing fund" which each represents 3% of the basic costs of the project, (ix) "operation", (x) "consultant service" and "vehicle" which forecast allowances represent 2% and 1% each of the basic project costs. The allocation for the "workshop and seminar" expense category is less than 1% of the base project costs.
Project funding
It is provided by: (i) IFAD under a super concessional loan, a concessional loan and a commercial loan, (ii) the benefits, (iii) the government of Mali and (iii) co-financers47 to be substantial. IFAD commercial, matching in total to 39.0% of the total project cost. These contributions would most definitely be provided for the first three years of project implementation. The co-financials to be somewhat would contribute up to 39.6 million USD equivalent to 23.6 trillion FCFA, or approximately 39.6% of the total cost of the project. These contributions would come from the third year of project implementation, that leaving ample room for maneuver for the government supported by IFAD to identify interested co-financials. The Beneficiaries would provide approximately 14.0 million USD (8.4 trillion FCFA) including 5.6 million USD in direct contribution in kind and/or in cash as well as 8.4 million USD as a loan from the SFD.